If Houston Company Billed a Client for $10,000 of Consulting

question 62

Multiple Choice

If Houston Company billed a client for $10,000 of consulting work completed,the accounts receivable asset increases by $10,000 and:

• A)Accounts payable decreases $10,000.
• B)Accounts payable increases $10,000.
• C)Cash increases $10,000.
• D)Revenue increases $10,000.
• E)Revenue decreases $10,000

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Definitions:

Actual Manufacturing Overhead Costs

The incurred expenses related to producing goods that are not directly tied to the product such as utilities, rent, and maintenance.

Overapplied Overhead

A situation where the allocated manufacturing overhead costs for a period exceed the actual overhead costs incurred.

Manufacturing Overhead Costs

All indirect costs associated with the production process, such as utilities, rent, and salaries for non-direct labor.

Actual Manufacturing Overhead Costs

The real costs incurred from indirect manufacturing expenses such as utilities, rent, and salaries not directly tied to production.